Beyond Loss Aversion and Liquidity Traps: A Behavioural Stated Choice Analysis of Speculation, Over-Leverage, and Residential Housing Prices in Kenya's Affordable Housing Agenda

Charles Okeyo Owuor
Additional contact information
Charles Okeyo Owuor: Egerton University

African Journal of Commercial Studies, 2026, vol. 7, issue 2

Abstract: The global residential housing crisis has increasingly been attributed to behavioural anomalies rather than purely rational market forces. However, the empirical integration of loss aversion, over-leverage, and liquidity dynamics within emerging African housing markets remains underdeveloped. This study advances a comprehensive behavioural framework for understanding residential housing price determination in Kenya, drawing on stated choice methods and prospect theory to analyse how loss aversion interacts with over-leverage and liquidity constraints to drive speculative price distortions. Using data from 234 real estate investors obtained through agents in Kenya, the study employs a multi-stage analytical approach, including hierarchical regression and mediation analysis, to examine how psychological expectations mediate the relationship between microeconomic indicators and housing prices. Findings indicate that locational attributes exert the strongest influence on housing prices (β = 0.846, p

Keywords: Loss Aversion; Over-Leverage; Liquidity; Stated Choice Methods; Residential Housing Prices; Behavioural Economics; Affordable Housing; Kenya; Prospect Theory; Financial Literacy (search for similar items in EconPapers)
JEL-codes: D91 G41 R31 (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ijcsacademia.com/index.php/journal/article/view/509

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cwk:ajocsk:2026-57

DOI: 10.59413/ajocs/v7.i2.39

Access Statistics for this article

More articles in African Journal of Commercial Studies from African Journal of Commercial Studies
Bibliographic data for series maintained by Dr. Charles G. Kamau ().